Black Mass: Whitey Bulger, the FBI, and a Devil's Deal by Lehr, Dick, O'Neill, Gerard (2012)

PART TWO

I do my best to protect you and I may break a
few rules, but I break them in your favor
.

RAYMOND CHANDLER,
THE BIG SLEEP

CHAPTER FOURTEEN

Shades of Whitey

By 1984 Billy Bulger was securely on top of the State Senate, running it smoothly and firmly with vinegar and honey. Yet he had ignored his private law practice with a boyhood friend from Old Harbor and was having trouble financing his hectic household of nine children. He worried about the roof falling in on a house full of kids and about paying their tuitions. He fretted that his battered car would drop dead by the side of the road, stranding his wife, Mary, as she gamely transported youngsters hither and yon. Even though he earned between $75,000 and $100,000 that year, he was swimming upstream, with more money going out than coming in. In his memoir he lamented that though he was not bankrupt, he was “not far from it.”

Then, according to Billy, a miracle client walked into his downtown law office out of the blue. Two brothers wanted to buy back property from a customer, and Bulger got them a $2.8 million loan from a friendly South Boston bank to do it. In exchange for his help in negotiating the loan and the property buyback, Billy was offered a prodigious fee. The prospect flooded Bulger with happy visions of hearth and home: “A new car for Mary . . . a new roof.”

After paying sporadic attention to the buyback, Bulger settled it in 1985 and agreed on a deferred fee of $267,000, more than enough for Mary and Bill to stop worrying about the car and the tuitions. But the cash flow problem persisted because Bulger agreed to take the fee in 1986. He told his law associate from South Boston, Thomas Finnerty, that he would be among the “impoverished rich” until his money came through.

But Tom leaped to the rescue. He offered to give Bulger a $240,000 loan against the fee. Bulger was ecstatic, but his relief was short lived. A few weeks after taking the loan he learned that Finnerty had been working with Boston developer Harold Brown. Bulger flushed with alarm when he heard that Finnerty was dealing with the likes of Brown and warned him that the disreputable landlord was trouble. But Finnerty laughed it off and teased Bulger about being a compulsive worrier. Besides, he said, a $500,000 fee from the developer was already in a trust fund Finnerty had set up.

Recoiling at the mention of the fund, Bulger realized that his recent loan came from Brown money. “You didn’t tell me that,” Bulger objected. “I’m paying it back—and right now. I want no connection, however remote, with Brown.” Back went the Brown money, with repayments totaling $254,000 with interest by the end of 1985. Mary was told to put plans for easy street on hold.

The next year Bulger felt more than justified in his cautious reaction when Brown was convicted of bribery in federal court. Brown began wearing a wire for the FBI, seeking out conversations with politicians. Bulger and Finnerty joked about avoiding Brown in a rainstorm for fear of being electrocuted. They had a good laugh.

▪   ▪   ▪

But Harold Brown told an entirely different story.

The Bill Bulger case started in 1983 when federal investigators caught a corrupt city inspector taking a bribe and converted him into an under-cover agent. In 1985 he put on a hidden wire to record conversations and revisited regular customers, including Harold Brown. The hands-on landlord paid the inspector $1,000 to “lowball” the cost of a housing project so that Brown could save $24,000 in permit fees.

Brown then walked into a trap after being subpoenaed before a grand jury. He did not know he was on tape with the inspector and thought he was up against some bumbling police work. He tried to lie his way out of it, telling grand jurors he never gave anyone a dime and perish the thought. He was quickly indicted for perjury and bribery and just as quickly turned into a government agent, wire and all. He was looking for a plea bargain that would get him out of doing prison time. The prosecutors asked Brown, what do you have? Brown said Tom Finnerty and Bill Bulger.

Brown’s bruising encounter with Finnerty had its origin in the mid-1970s when Brown saw the potential for a skyscraper at the run-down lower end of State Street, one of downtown Boston’s colonial-era boulevards. He began buying up property one decrepit lot at a time. As the state’s largest landlord, with holdings worth between $500 million and $1 billion, Brown foresaw the building boom of the 1980s and waited for it to reach him.

The push to develop the site started in 1982 when the city, reeling from the first year of a new statewide reduction of property taxes, found itself stuck with a $45 million bill from tax abatements due commercial property owners. Mayor Kevin White needed help from the legislature to get bonding authority to underwrite rebates, and Bulger pushed it for him—with the proviso that the city would sell property to the state to launch a convention center authority. Bulger and White appointees immediately controlled the new state agency.

Another part of the legislation required the city to sell five parking garages, including one that became part of Brown’s project. The garages were not auctioned off to the highest bidder but instead transferred to the city’s redevelopment authority, which could sell them to developers as it pleased. It was a closed shop, and Bulger was part of the planning process.

After White and Bulger struck their deal, Brown and his partner, a prominent architect, became the odds-on favorites to develop the State Street site. The designer had the endorsement of the Boston Society of Architects, and Brown already had most of the land. Then a White confidant, former Massachusetts attorney general Edward McCormack, approached Brown. McCormack asked for an outlandish stake in the project in exchange for monitoring the city hall approval process. When that was rejected, Finnerty suddenly appeared as a lesser-known lawyer willing to take less money.

At the time Finnerty began negotiating for a piece of the skyscraper, he was a criminal defense lawyer with no track record in big-time real estate. The crossover is so daunting that it is seldom tried in Boston. The two law specialties require two different skills—low-key urbanity versus hard-nosed advocacy. Finnerty, a former district attorney, was in the brassy South Boston tradition and had little in common with the muted lawyers from white-shoe firms who usually handled downtown developments. Brown danced with Finnerty for months, never saying no, never saying yes, pushing the project along its route in city hall as they talked between late 1983 and February 1985.

When Finnerty saw Brown racing to the finish line on his own, the negotiations became more intense. Brown capitulated in 1985, agreeing to “buy” Finnerty’s self-proclaimed interest that never existed for about $1.8 million. Finnerty never appeared at any design or development hearing on the project and did not represent Brown when another developer sued him over the size of the office tower.

Nevertheless, Finnerty deposited the first installment of $500,000 in July. In a rapid sequence Billy and Tommy, the two old friends from Old Harbor, split $450,000 in August and $30,000 more in October. But a month later the other shoe dropped for Bulger. In November a federal grand jury indicted Brown for bribing the city inspector and “other public officials.” Bulger returned his money to the trust three days later, calling it a repaid loan.

By the time the transactions became a public controversy in 1988, Finnerty had dropped any pretense of being a real estate lawyer for the massive project. He said he had joined the Brown development team to bring it respectability, using his law enforcement background to overcome Brown’s past association with arsonists. His price for respectability was $1.8 million, and he actually filed suit against Brown to get all of the money.

But a few weeks of public clamor about the deal was more than enough for the low-profile landlord. He suddenly folded, settling the suit. Brown called it a pragmatic decision to pay less in the long run. “I am a businessman, and it is not my job to pursue investigations,” he said. He never uttered another word about it.

Despite his defiant public stance, the controversy around the skyscraper at 75 State Street was an intense ordeal for Bulger. When the furor was at its height, the Senate president was briefly stalked “by the black dog of melancholy.” At the end of 1988 he slipped out of the State House and walked over to Boston Common, where he sat glumly on a park bench. He watched people eating lunch on nearby benches and, in his disconsolate reverie, became angry at their indifference to media misconduct. He thought, “Don’t any of these people walking our streets or the paths in our parks . . . see what the media are doing in this city?” The episode passed quickly as he realized that strangers had no reason to be aroused by his problems. The angst departed, and he headed back to his office “with a lighter step, ready for whatever awaited.”

Bulger filed an affidavit stating that he borrowed money from Finnerty without knowing its origin. Over time Billy’s version of the scandal became an accepted part of his bloodied but unbowed image in South Boston. Once again Billy Bulger had stood up to outsiders and been victimized by the media for it. As always, he came out on top.

But Bulger’s brief on 75 State Street holds up only if the facts are discarded. Bulger was not the innocent victim. The slumlord was. And just as the FBI had protected Whitey Bulger for fifteen years, the bureau stepped in to keep William Bulger out of harm’s way.

During a federal review of several downtown developments, including 75 State Street, investigators uncovered records that shattered the Senate president’s claims. The documents—which remain buried in federal files—show that Bulger actually kept a full share of Brown’s money. Although Bulger “repaid” the loan, Finnerty washed the money back to Bulger through other law firm accounts. Through this circuitous route, Bulger received about half of the original $500,000 down payment.

Moreover, Bulger did not get anywhere near the $267,000 fee he said stood behind the loan as collateral. The law firm records show that he received less than half the claimed amount, or $110,000.

The records would not prove extortion, but they destroyed his tale of borrowing money to fix the car and roof for Mary. Instead of putting the money into household improvements, Bulger invested it in a tax-free bond fund. If this got out, it would not sit well with Southie. After all, Billy would not be Billy if he took the money. Taking the money would be shades of Whitey.

▪   ▪   ▪

But Bulger had some help within the FBI. Despite the public clamor, the Brown extortion claim was already a closed matter in the bureau. The same John Morris who had protected Whitey Bulger and taken money from him was now on the case as supervisor of the squad overseeing public corruption crimes. In 1988 Morris moved quickly to head off damage to Billy Bulger by shutting down the case a few days before the Boston Globe published a front-page story about the deal behind the skyscraper.

Once again, Morris had to wrestle with his conscience. The persistent Brown case was another in a lengthening line of decisions that required him to calculate the risk of doing the right thing against the certain wrath of a ruthless crook who had bribed him multiple times and slowly seduced him with fine wine and a curious camaraderie. But Morris knew Whitey Bulger would not hesitate to use his weakness against him. Indeed, at the most recent dinner party Morris held for the informants (a small gathering at Debbie Noseworthy’s apartment in Woburn) Whitey upped the stakes. After John Connolly and Stevie Flemmi had left the apartment, Morris saw that Bulger was hanging back by the coat rack. “As he was putting his coat on,” Morris said, “he pulled out an envelope and gave the envelope to me. He said, ‘Here, this is to help you out,’ and walked out the door.” Inside the envelope was $5,000 in cash.

With this recent exchange in the background, Morris closed the 75 State Street file. But the skyscraper story lumbered on, especially after it was learned that the FBI had never even questioned Billy Bulger. Massachusetts Attorney General James Shannon called for a renewed federal effort to clear the air.

Enter John Connolly. With Billy Bulger now squarely on the firing line, Connolly took Morris aside and pressed him on whether the Senate president should agree to be interviewed. Morris recalled that “Connolly approached me and asked me what the senate president should do, that he’s been asked to submit to an interview and what did I recommend that he do?” Morris told him that Bulger should do it because the uncorroborated Brown allegations made for a soft case. “I didn’t feel that the case was very strong,” Morris continued. “I didn’t think that he could hurt himself. I thought it would be to his advantage to submit to the interview and put an end to the public clamor.” The premise for the renewed investigation became Bulger’s best interest rather than no-holds-barred work in the trenches.

Having covered up for Whitey to the point of warning him about other FBI informants, Connolly now swooped in to run interference for brother Bill—his real hometown hero. Whitey was mostly business. But Billy was something of an idol. Over the years Connolly had masked his relationship with Whitey but never his friendship with Billy—Connolly wore that on his sleeve, exulting in his ties to the altar boy from St. Monica’s. Connolly believed that his friendship with Billy had convinced Whitey to become an informant. He called Billy a “lifelong friend . . . a mentor . . . a very close friend.” And Connolly worked the relationship hard inside the FBI, parading agents through Bulger’s Senate office to meet the president in person. Bulger once introduced him to his fellow senators during a session, and Connolly was given a standing ovation. Knowing that many agents are like aging ballplayers who fear life after the glory years, Connolly often told colleagues that Bulger could help them get high-paying jobs when they retired. No way was Connolly going to allow a hostile FBI interview of Billy, let alone a no-holds-barred probe for the truth.

In these circumstances it was not surprising that the second FBI investigation consisted solely of an interview with Bulger in his lawyer’s office. Prosecutors and an FBI agent listened to a two-hour speech from Bulger in which he denied any connection with Brown and stuck by his loan and fee story. He said that Finnerty “swore” to him that he never invoked Bulger’s name to gain an advantage. And Bulger added a new twist to the loan: this time around it was not about meeting household expenses but rather about taking preemptive action because he didn’t trust Finnerty to give him his full share of the fee. Bulger simply wanted his money while the getting was good.

▪   ▪   ▪

Bulger’s friendly FBI interview became the basis for shutting down the investigation forever. Jeremiah O’Sullivan, who had become interim US attorney, said the case showed power brokering but did not rise to the level of extortion. Asked if he was leaving the impression that wrongdoing had occurred without being addressed, O’Sullivan said it wasn’t his job and that further action should come from state authorities.

Despite his behind-the-scenes interventions for Whitey Bulger, O’Sullivan did not recuse himself. He had looked the other way on race-fixing and alerted the FBI to the state police surveillance at Lancaster Street. He’d played a key role in saving Bulger from Sarhatt’s internal FBI review and then was the one who banished the doomed and desperate Brian Halloran from the witness protection program. Now the cocksure prosecutor proclaimed the Bill Bulger case dead on arrival, not even a close call. It would be O’Sullivan’s valedictory from law enforcement.

One of the matters that O’Sullivan discarded to lesser agencies was the downside of Bill Bulger’s stay at the State House. Belying Bulger’s public persona of rock-solid rectitude were steep legal fees for dubious services. For example, in addition to the $250,000 in Brown money funneled back to him by Finnerty, Bulger had split fees with a State House lobbyist who brought him influence-seeking clients. The lobbyist was Richard McDonough, the son of a legendary political rogue, Patrick “Sonny” McDonough. Although the son lacked Sonny’s gruff charm, he was a street-smart hustler who had learned well the byways of the State House. Indeed, it was Dickie McDonough who had originally brought Bulger the magical case from the contractors in need of the $2.8 million bank loan. And it was Dickie who received $70,000 in return for the referral. He also brought Bulger another client, a California weight-loss company that sought assistance in getting one of its products off the Food and Drug Administration’s carcinogenic list. The company thought that Bulger could help with the FDA, but all he could do was get an appointment with minor bureaucrats in a different agency. Despite the lack of results, Bulger and McDonough split a $100,000 fee.

In their interviews with federal investigators, neither Bulger nor McDonough could produce paperwork to support the fees. McDonough knew next to nothing about the work done for clients that indirectly paid him $120,000.

Two months after O’Sullivan slammed the door on any further investigation, the Senate president was the guest speaker at a retirement party for FBI agent John Cloherty. Cloherty had handled press relations when the bureau closed its review of 75 State Street. He was also a former member of the Organized Crime Squad under Morris and a friend of Connolly’s. It was a rollicking good time.

▪   ▪   ▪

About a year after Bill Bulger and Tom Finnerty split up $500,000 from the state’s largest landlord, a small South Boston realtor received an offer he couldn’t refuse. Once again money allegedly was demanded under duress, but the terms were starkly different in Southie. Raymond Slinger’s alternative to paying $50,000 was to get blown away by a shotgun.

Slinger thought he might be on to something good when his dealings with Whitey Bulger began in the fall of 1986. Bulger stopped by his office unexpectedly for a short primer on how to cash in on the suddenly surging local real estate market. They chatted for about twenty minutes, and Slinger may have seen himself working with Bulger in some real estate deals.

But it was not to be. Six months later Slinger was summoned to the dreaded Triple O’s bar. He gingerly entered the dank, claustrophobic barroom, with its warped floorboards and low ceiling, its dark walls and sticky tabletops. It was a place where someone was always playing pool while nursing a drink and solitary patrons stared into their shot glasses and beer chasers. Slinger was ushered to the second-floor office, where Bulger was waiting for him, arms folded. He looked up and announced, “We got a problem.”

Bulger said he had been hired to kill Slinger, an assignment that would require him to arrive at Slinger’s Old Harbor Real Estate office “with shotguns and masks and so forth.”

Bulger would answer no questions, including who wanted Slinger dead or why. He would only talk about what could be done about it—pay Bulger to cancel the contract. Slinger, who had some large debts and his share of enemies, gulped and asked if he could be out from under for $2,000. But Bulger laughed at him and said his boots cost more than that.

BULGER: “$50,000 would be more like it.”

SLINGER: “I don’t have that kind of money.”

BULGER: “Well, I think you better find it.”

Slinger went straight to the downstairs bar to fortify himself before returning to his East Broadway Street office. He made a desperate call for help to City Councilor James Kelly. After Kelly talked to Bulger, he told Slinger everything should be okay.

But it wasn’t. Two days later Slinger heard from Kevin O’Neil, the Bulger associate who ran Triple O’s. O’Neil told him “the man” wanted to see him again. Sensing the worst, Slinger returned to Triple O’s with a racing heart and a gun borrowed from a friend. Once inside, two of Bulger’s henchmen seized him immediately, pushing and shoving him up the stairs to the second floor, where a ranting Bulger was waiting. Slinger recalled that they “grabbed me and pulled me upstairs, frisked me, opened my shirt, took my gun away, and started belting me, beat me up.” Out of the melee Slinger had the clear memory of Bulger kicking him.

Bulger and his underlings sat Slinger down hard in a chair. They made sure he was not wearing a wire and then upbraided him for talking to Kelly. Bulger took Slinger’s gun and placed the barrel pointing down on the top of Slinger’s head, explaining that the bullet would go down the spinal column and not cause a bloody mess. Bulger then ordered an aide to get him a “body bag,” and Slinger nearly passed out from fright. “I thought I was done.”

The moment passed, and Slinger was given a second chance to come up with the money. With a ripped shirt and scarred psyche, Slinger stumbled to the downstairs bar again. When he got back to his office, he called his sister and wife and lined up loans for a $10,000 payment. He also agreed to a weekly payment schedule.

About two months after Bulger slapped around and terrorized him, Slinger began to stagger under the burden of making the weekly $2,000 payments, which he put in a paper bag and handed over to O’Neil in a car outside the realty office. Slinger had paid half the debt, but he was so desperate that he turned to law enforcement. In the spring of 1987 he reached out to the FBI.

Without making an appointment, two agents showed up at the Old Harbor Real Estate office one day. Slinger opened his door to John Newton and Roderick Kennedy.

Later Newton would say that Slinger was willing to testify about a “shakedown” by Kevin O’Neil. But he claimed that Slinger never mentioned Bulger’s name. For his part, Kennedy could not remember a single detail about the interview, including whether it happened at all. And in an extraordinary departure from standard procedure, neither agent wrote a report on the session with Slinger.

In a classic example of what not to do with such a case, Newton discussed Slinger’s account with his boss, who talked it over with the assistant agent in charge. The top-level managers promptly dropped it, ignoring internal guidelines that they either refer it to prosecutors or explain their decision not to use it to FBI headquarters.

Ironically, the unproductive FBI interview helped Slinger get off the hook in his unexpected business relationship with Whitey Bulger. After the agents left his office, a worried Slinger immediately called O’Neil to cover himself by explaining that the unexpected visit by the FBI was none of his doing. O’Neil called him back the next day and told him he could cancel his installment plan. The $25,000 would be payment in full, a rare half-price sale from Bulger Enterprises.

Some years later Newton admitted that the bureau passed on what would have been a great extortion case. He was asked in court if there was a connection between the case dying and Bulger being an informant.

When an informant is involved in a crime, he said, “either you’re going to go ahead with this investigation or you’re going to have to figure something out.”

The something figured out was Agent John Connolly telling Whitey to back off on the balance due from Slinger. That was what being a loyal friend was all about.